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story, reactions to china's new leader. bp will have to cough up a record fine for the 2010 oil spill in the gulf. behind the numbers. plus, apple versus mcdonald's. which stock is the better bite? and, forget calorie-free soda - this one claims to help you lose wieght. first business starts now. you're watching first business: financial news, analysis, and
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today's investment ideas. good morning. it's friday, november 16th. i'm angela miles. in today's first look: the showdown at the white house. president obama is corralling in friends and foes from congress today to figure out how to avert going over the fiscal cliff. meanwhile, the market continues to drift lower in what could become one of the worst weeks in months. dell dinged while gap is giddy. the computer company reported earnings last night. earnings were down 47% on slipping pc sales. however, dell backed its full-year forecast. gap shares rallied nearly 4% after the close on better-than-expected earnings news. fed chair ben bernanke says mortgage lending standards are too tight, preventing people with sturdy credit from buying homes. meanwhile, mortgage rates dropped to another record low. the 30-year drops a notch to 3.34%, the 15-year to 2.65. today's trader talk takes us
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around the world with gary kozlowski. good morning to you. > > good morning. > > let's start with the good old u.s. of a, and cliffs and bluffs. what is the market telling you about the so-called fiscal cliff? will we see a resolution? > > there is some uncertainty that's going on, because what we're seeing, with everybody so concerned, you would think that the u.s. dollar in particular would be pulling back. we are seeing the dollar up in the mid-81 range, and it looks like it is going to continue to run. also, another thing that we are looking at is the indices. they are pulling back down, and i think we still have some more room for them to pull on down. > > what about the eurozone going into yet another recession? what is the fallout? > > wow. we haven't seen the fallout in the euro dollar yet. in yesterday's market, it stayed in the $1.27 range, which really caught a lot of people by surprise, especially with the dollar gaining a little bit. > > tensions are rising in the middle east. will that rattle the oil market? > > we're seeing brent crude is
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running up, yet the wti crude here in the united states has been pulling down - it's been staying in the mid-$80s. normally we see anywhere from a $15 to $20 range between the west texas and brent. but we're seeing the brent going up, and i do see that continuing. again, with israel and everything else, nobody has really talked too much about iran lately. they're still there. they still have their nuclear issue. and they're still looking to block the strait of hormuz if pushed too far. i would look for brent crude oil to continue to rise up. > > there is just a lot going on. thank you gary. > > there certainly is! china has a new leader, 59-year old xi jinping. he's travelled widely in the west, organized the beijing olympics and has a daughter attending harvard. for the next ten years, he will head up a ruling elite of seven men and oversee economic change in the world's most populous nation. to many, xi jinping's life of contradiction may be to the west's advantage. head of china's ruling communist party and married to a pop-star, his teenage years were spent
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working the fields in one of china's poorest areas. his daughter now attends harvard. as an adult, he's seen a lot outside china. "he lived in the u.s. and learned american business. was it a favorable experience? yes." at this chicago business conference promoting trade between the u.s. and china, participants knew well how xi jinping worked his way up the party ladder - that, officially, he'll be in charge of the military, but his experience is in politics - governorships and party chief in shanghai who will likely fight corruption that has scandalized china's leadership lately. "i think he's more open than other leaders we've had." alex lives and works in shanghai. "i'm very positive that he's practical and closer to the people - more for people."
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china's new leader will also oversee a great migration that's happening - millions are moving from the interior of the country to eastern cities near or on the coast. that may create opportunity for western interests seeking china's consumers. "for u.s. companies, there will be more inexpensive labor, but there may also be opportunities to build infrastructure west where labor costs are cheaper mid-country than in the west." the imbalance of trade, accusations of an undervalued currency and protectionism are still challenges, but observers think conditions could improve within five years. bp will pay a record fine of $4.5 billion for the massive spill in the gulf. the oil giant is also pleading guilty to criminal charges in relation to the deaths of 11 workers and for lying to congress. the disaster happened in 2010 and is considered the worst offshore oil spill in u.s. history. the chairman of bp issued a
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statement saying: "we believe this resolution is in the best interest of bp and its shareholders." a seperate $7.8 billion settlement between bp and 100,000 businesses and other is under consideration in new orleans. trouble is cooking at hostess brands. in a drastic measure, the company gave its striking employees an ultimatum, saying it will liquidate the company if workers did not return to the company by the end of the day thursday. many workers returned. hostess threatened to file the motion to liquidate the company immediately and close locations by next week. hostess says production at 12 of its 33 plants was affected by the strike, where 18,000 people work. papa john's and denny's are leading the controversy over healthcare reform. the ceo of papa claims obamacare will cost his company 5 to 9 million dollars per year. reports say he intends to pass the cost on to customers and via potential
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layoffs. that has sparked boycott, while supporters are calling today national papa john's appreciation day. a denny's franchise owner is reportedly backing off plans to charge customers more but may cut back employee hours. today is the deadline for states to declare plans to create healthcare exchanges. a mcchange up in leadership at mcdonald's. after 35 years with the company, jan fields, president of mcdonald's' usa division, is stepping down. mcdonald's' global chief restaurant officer will replace fields. last week, mcdonald's reported some disappointing numbers - same-store sales declined for the first time in 10 years. fields will leave the company december 1st. a highly anticipated report from congressional republicans investigating the demize of mf global places the blame squarely at the feet of former ceo john corzine and federal regulators. customers lost a combined $1.6 billion when the firm tanked last fall. the report claims corzine did not properly
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supervise the firm, and the sec and commodities futures trading commission failed to share critical information. the report concludes the losses were "preventable," but stopped short of saying anyone broke the law. wal-mart reported in a little something extra with its earnings this week. the company told the sec that it's expanding an investigation into bribery accusations abroad - to china, brazil and india. earlier this year, wal-mart was accused of bribing officials in mexico. meanwhile, the company beat wall street's expectations on earnings, reporting a profit of $3.6 billion. wal-mart's cfo said the retailer expects the holiday season to be very competitive. the postal service has a staggering loss of $15.9 billion. the post office is under the finanical strain of having to pre-pay for employee health benefits. the postmaster general is urging congress to take action, including going to 5-day delivery service.
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farmland prices are growing. that's according to the federal reserve. demand for farmland in the plains states remained strong in the third quarter, and prices rose 25%. the fed also said this summer's drought did not effect land demand, but did hurt farmers' incomes during the summer months. farmers may expect the drought to continue to drag down incomes in the coming months. harsh weather conditions in europe could end the days of cheap wine. according to, grape farmers in spain, france, italy and portugal are losing much of this year's harvest due to drought, frost, and flood. wine production in europe will be down by 2.7 billion bottles, forcing higher prices. united airlines is facing more tech troubles. the airline experienced its third computer outage since june yesterday. thousands of united's thursday flights were affected. united's computer system has been in transition from its old "apollo" reservation system, which united introduced 40 years ago, to a hewlett-packard-based one called "shares." but the transition has not been smooth.
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"this transition from apollo to shares has not gone well. there will be hiccups expected, but backups should at least be able to help them get the planes pushing back from the gate. there are some questions to answer here." the outage lasted about two hours thursday morning and affected half of united's flights. popular energy drinks are under investigation. federal officials are checking into reports of 13 deaths during the past 4 years that may be linked to 5-hour energy drinks. the manfacturer calls the claims "overblown" and says the beverages have no more caffiene than a cup or two of coffee. pepsi plans to fight fat with fizz. pepsico plans to release a fat-fighting beverage called "pepsi special." the soda, which will be released in japan only, contains dextrin, which helps to slow fat absorbtion in the body. no word yet on when the product will be released.
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still to come, should you buy on the dips? we'll get some very opinionated trader takes later on. but first, some optimistic views on the housing sector are next with bill moller.
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the housing wreck - that's what got us into this mess, and it'll likely be the housing recovery
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that'll fully and finally get us out of this waning recession. to track the improvement we always look at the numbers. and each month, pumps out national and regional housing data. the october figures just went to press, so let's talk with matt laricy about them. he was named among the country's top agents by realtor magazine. good for you. and you're also an agent with americorps realty. > > that's correct, yeah. > > so tell us, are you optimistic? you sure sound like you're full of energy and forward-looking optimism. > > i think the market is coming back. overall, the housing inventory is down about 17%, which is showing that people are out there buying and there's not as much on the market as there was before. the average market time is now about 97 days, which is down 11% from prior. and the median price overall is $189,900. which has flat-lined - it's about the same as it was this time last year - but the good thing is that we're not stepping backwards, as we have been in past years. we're actually kind of leveling off. > > but it shows you how far we have to go. $189,900? what was it five years ago, something like $250,000? > > about $249,900 yes.
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> > so we do have a long way to go. but you're looking at trends, and so you are somewhat optimistic, because things, while the prices have flat- lined to some degree, everything else does seem to be up. > > yeah, across the country things are looking up. if you look in florida, one of the hardest-hit areas, those prices are coming back. sales are really flourishing there. out in the west, california, nevada, phoenix, 3 really hard- hit areas, have really started to come back in full swing. market time there is under 30 days in a lot of areas. > > that is really high. they actually have bidding wars going on. > > yeah. a lot of people are really selling things really quickly out there. i like to say if it's priced right and it shows well, pretty much anywhere in the country that it's kind of hotter, it's selling really quickly. > > what do you look at though as anything worrisome? do you feel that we have now turned the corner, or might we still fall back into a housing recession? > > i think some areas we have to worry about are like the rust-belt areas or areas directly correlated with maybe employment. some areas with a
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little bit of higher unemployment still have a little bit of ways to go. the fact is, if you're not working, you're not going to be able to buy a house. > > so, you're glad you're in real estate right now. for a few years, a lot of people got out of the business because it was so glum. you really are sanguine. > > i think things are really, really good, especially where i'm from, here in chicago. prices are really, really coming back. i am running into a problem where we don't have enough inventory to supply all the buyers. > > matt laricy, thanks so much. > > thank you. thank you bill. just ahead, what traders have to say about a drop in some wall street favorites. traders unplugged is coming up.
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while some traders are mulling over hot topics in their minds, our traders are ready to cut loose with their lips in traders unplugged. joining us now, pro traders alan knuckman and jared levy. good morning guys. round one: certainty of uncertainty? won't there always be some level of uncertainty in the world? should that really hamper hiring? > > it's an excuse. it's a cost-cutting excuse. why hire people, why pay for that? and a good example of not hiring because of technology is, look around the exchange. there used to be 10,000 guys in the pits. guess what? they trade on a screen now, and that has changed the employment picture. > > there are different times of uncertainty. if you are in a plane and the pilot's uncertain he can land safely, you are going to have a different concern than if there's uncertainty whether you're going to get your coffee or
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maybe some tea. > > i am not completely certain my tooth isn't going to get knocked out, but i still brush my teeth. > > but again, it's how much danger is looming, and right now, the danger that's looming is still a little bit more uncontrollable. > > sky is falling! sky is falling! sky is falling! > > round two: high commodity. what's likely to happen with the price of marijuana now that it's legal in states such as colorado? that rocky mountain high. > > you want to go ahead and incriminate yourself on this one? > > i am not going to incriminate myself. i am not a marijuana user, but i do think there are some tax benefits from this situation, and it's just another crop. you have to think about it. the constitution was written on hemp paper. until 1910, it was perfectly legal, and it was used for rope and many other things. > > i actually support alan on this one. i think marijuana wouldn't be a bad thing. we could use all the revenue we can get as a nation. here is what i'm looking at. there are some derivatives plays here. i would look at something like domino's pizza, because yes, you do get the munchies according to well- known fact, and, yum! brands. > > all right, that's a stretch. how about reynolds; alteria; j&j, if they get in the marijuana business - it's a drug - and, lastly, adm, archer daniels midland, the supermarket to the world. they can help in the growing of marijuana.
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> > ok. speaking of eating, round three: eat your ipad? mcdonald's sales drop for the first time in almost a decade and apple stock has dropped. which is the better buy? > > this is a tough one. i love apple as a company, i think they are doing a lot of the right things. i also think their value dropped to an extent because people expect them to trade on the multiple like a growth stock, and they're just not there. so apple, i think, has got some more room to fall. i would look to buy it slowly here. but i actually think that- > > i like both. i like both. i think they are both at a healthy discount after some price troubles, but we have come down from $700. $520 was that original break-out area, so here down at that level, i think you are getting some good value. and mcdonald's is also 15% off the highs, and where they've had problems is because of the currency issues and the slowdown in europe, and in their growth around the world. > > look at the competition with mcdonald's too. for the first time in a long time they actually mentioned competition on their earnings call. > > who competes with mcdonald's?! > > burger king. chipotle. > > where else can you get a mcrib? you can't get a mcrib
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anywhere else! i think it's a good time for the bonus round. we're talkin' turkey today with thanksgiving right around the corner. what is the average weight of turkeys purchased for thanksgiving? > > 19 pounds. > > no it's not. it's 14 pounds. > > very close! 15 pounds. not too bad. good job. good to have you on the show. > > i am a renaissance man. still ahead, a trader explains why he's all about buying shares of cisco and dell. chart talk is next!
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tim biggam of tradingblock joins us now for a closer look at a couple of tech stocks. are tech stocks back in favor with you tim? > > i think the tech stocks that were really out of favor earlier started to come back into favor because of the relative valuations and also the nice dividend yield in this market environment. so, two
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names that had kind of been thrown to the wayside, dell and cisco, i kind of like down around these levels. > > let's talk about some levels were you would buy, starting with cisco systems. what is your buying point on this stock? > > really anywhere around here. they came out with what i thought were really nice numbers, not only on the earnings side, but more importantly on the revenue side. this stock has gotten sold into submission with fears that government spending, which is a big component of cisco, will fall off that fiscal cliff so to speak. but not the case, and cisco is priced for utter disaster. so, i also like it on a yield basis. it's yielding way more than the 30-year bond here. > > no fiscal for cisco. so what about dell? where would you want to own this? > > same kind of story there. dell is reinventing itself as more of a services company. certainly the hardware side is languishing to say the least, but, again, you are looking at a market multiple that's below six, also with almost $4 a share in cash, the stock trading around $9.50. i like it anywhere around there. it's just
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kind of a substitute not only for bonds, but also with a little upside growth here, i could see the stock certainly around $11, come first quarter of next year. > > i take it these are buy- and-hold stocks for you, that you are going to hang on to them for, what? maybe a year? longer or shorter than that? > > at least a couple quarters or so. we'll see what happens with the market. but these are not the trading vehicles that they once were. these are kind of that low-beta, big-value names, so this would probably be a three-to-six-month time horizon. > > nice to have you on the show today, and have a great weekend tim. > > you too. thank you angie. it's closing time for our show today. coming up next week, ever feel like you were ripped off by a car mechanic? watch our show for tips for ladies and men on how to avoid getting taken when there is trouble under the hood. from all of us at first business, thank you for watching. enjoy your weekend!
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good morning, we have breaking news about a shocking crime in vallejo. a woman kidnapped from a mall and brutally beaten. the child that is behand bars this morning. will it hold? and we have breaking news from just minutes ago. a final decision was announced about the future of hostess. it's all ahead on the ktvu
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channel 2 morning news. good morning. thank you for joining us on this friday morning, november 16th i'm pam cook. i got to drive in some at least drive weather. but let's see when the rain is coming in. let's go to steve paulson. >> pam, toy it for you. >> thank you. that is nice. >> it's light. we've had a little drizzle. the main ban is just offshore. that will swing in and is set the stage for a cloudy, rainy day. we'll have more coming up on your weekend. here is sal. steve, the wet weather is a concern for this morning's commute. although it's not here yet it will probably get here soon. you want to give yourself extra time this morning. let's take a look at interstate 880 north and southbound the traffic there looks pretty good if you are driving past the coliseum. again

First Business
FOX November 16, 2012 4:00am-4:30am PST

Gender Bender News/Business. Angie Miles. (2012) Whether women get charged more than men do when they take their cars to auto technicians. New. (CC) (Stereo)

TOPIC FREQUENCY China 10, Cisco 6, Dell 6, U.s. 6, Us 5, Mcdonald 3, Europe 3, Brent 3, Denny 2, Shanghai 2, Pepsi 2, Papa 1, Apple Versus Mcdonald 's 1, Papa John 1, Obama 1, Matt Laricy 1, United Airlines 1, United Introduced 1, Jared Levy 1, Angela 1
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